Highlights of the Quarter Ended September 30, 2024 (Unless otherwise noted, all financial amounts in this news release are expressed in U.S. dollars)
IBC is reporting the performance of "continuing operations" at its Copper Alloy division, "discontinued operations" at its Massachusetts facility, and a combination of continued and discontinued operations.1
Copper alloys division (continuing operations) sales remained steady at $4.9 million
Copper alloys division operations operating income1 dropped slightly to $322,000 from $338,000 in the prior-year period.
Copper Alloys gross margin remained largely unchanged quarter-over-quarter ("Q/Q").
IBC's consolidated net loss of $1.2 million ($0.01 per share) was driven by continuing closing costs at the EM division discontinued operations, by higher-than-normal corporate SG&A costs (largely due to the EM division closure), and by debt service payments.
The Company will host a live investor webcast to discuss these results on Friday, November 29 at 12 Noon Eastern.
Sales at IBC's continuing operations1 (its Copper Alloys Division) totaled $4.898 million, largely unchanged from sales of $4.906 million in the quarter ended September 30, 2023. The division's gross profit of $857,000 and gross margin of 17.5% largely equaled its performance in the prior-year period ($865,000 and 17.6%, respectively), as did its Adjusted EBITDA of $479,000 ($479,000 in the prior-year period).
Discontinued operations at the IBC's Engineered Materials ("EM") division had no sales, as all contracts were completed in June 2024, but continued to incur closing costs. IBC expects these to wind down in the coming months, potentially putting the company on a substantially stronger footing.
On a consolidated basis, IBC booked a loss of $1.2 million, or $0.01 per share, driven largely by the lack of revenue and ongoing closing costs at its discontinued EM division, by higher-than-normal corporate SG&A costs (largely due to the EM division closure), and by debt service payments.
IBC expects to incur a charge to operations in respect to the discontinuation of the Engineered Materials division's operations and is negotiating with the building landlord to minimize such costs.
"In spite of slightly softer quarterly demand in copper alloy markets, our Copper Alloys division continued to drive healthy sales revenue and maintained its gross profit, gross margin, and adjusted earnings as compared to the prior-year period," said Mark A. Smith, Chairman and CEO of IBC. "As closing costs at our discontinued EM division wind down over the coming months, I see IBC moving to a substantially stronger footing with significant opportunity for growth in the Copper Alloys division. On a parallel path, as we continue to pay down debt and strengthen our balance sheet through organic growth, I see a great deal of upside for the Company going forward."
Selected Results
Except as noted, all financial amounts are determined in accordance with IFRS.1
SELECTED RESULTS: Combined Continuing and Discontinued Operations ($000s)1
To supplement its consolidated financial statements, which are prepared and presented in accordance with IFRS, IBC uses "Adjusted EBITDA," which a non-IFRS financial measure. IBC believes that Adjusted EBITDA is a useful indicator for cash flow generated by the business that is independent of IBC's capital structure.
Operating income (loss) and Adjusted EBITDA should not be considered in isolation or construed as an alternative to loss for the period or any other measure of performance or as an indicator of our operating performance. Operating income (loss) and Adjusted EBITDA presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to IBC's data.
ADJUSTED EBITDA
Adjusted EBITDA in the Company's continuing operations represents the income (loss) for the period, and year-to-date, before interest, income taxes, depreciation, amortization, and share-based compensation. A reconciliation of the quarter loss to Adjusted EBITDA in IBC's continuing operations follows:
Quarter ended Sept. 30
2024
2023
($000s)
($000s)
Loss for the period
(652
)
(629
)
Income tax expense (recovery)
1
-
Interest expense
464
491
(Gain) loss on revaluation of derivative (non cash)
-
1
Depreciation, amortization, and impairment
172
158
Stock-based compensation expense (non-cash)
29
36
Adjusted EBITDA
14
57
For more information on IBC and its innovative alloy products, go here.
On Behalf of the Board of Directors: "Mark A. Smith " Mark A. Smith, CEO & Chairman of the Board
IBC is a leading advanced copper alloys manufacturer serving a variety of industries such as defense, aerospace, automotive , telecommunications, precision manufacturing, and others. At its vertically integrated production facility in Franklin, Indiana, IBC manufactures and distributes a variety of copper alloys as castings and forgings, including beryllium copper, chrome copper, and aluminum bronze. The Company's common shares are traded on the TSX Venture Exchange under the symbol "IB" and the OTCQB under the symbol "IAALF".
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Certain information contained in this news release may be forward-looking information or forward-looking statements as defined under applicable securities laws. Forward-looking information and forward-looking statements are often, but not always identified by the use of words such as "expect", "anticipate", "believe", "foresee", "could", "estimate", "goal", "intend", "plan", "seek", "will", "may" and "should" and similar expressions or words suggesting future outcomes. This news release includes forward-looking information and statements pertaining to, among other things, the Company's expectation of further growth in revenue and market demand, and the ability of the Copper Alloy division to increase its production capacity, reduce unit costs of production, expand its product portfolio and expand into new markets, the closure of the Engineered Materials division and the expected charge to operations in connection therewith, and the completion of existing contracts by the Engineered Materials division. Forward-looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control including: the risk that the Company may not be able to make sufficient payments to retire its debt, the impact of general economic conditions in the areas in which the Company or its customers operate, including the semiconductor manufacturing and oil and gas industries, risks associated with manufacturing activities, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, limited availability of raw materials, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. As a result of these risks and uncertainties, the Company's future results, performance or achievements could differ materially from those expressed in these forward-looking statements. All statements included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on assumptions made by the Company based on its experience, perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances.
Please see "Risks Factors" in our Annual Information Form available under the Company's profile at www.sedarplus.ca, for information on the risks and uncertainties associated with our business. Readers should not place undue reliance on forward-looking information and statements, which speak only as of the date made. The forward-looking information and statements contained in this release represent our expectations as of the date of this release. We disclaim any intention or obligation or undertaking to update or revise any forward-looking information or statements whether as a result of new information, future events or otherwise, except as required under applicable securities laws.
1 IBC reports non-IFRS measures such as "Adjusted EBITDA", "Operating Income," "Continuing Operations," "Discontinued Operations" and "'Combined Continuing and Discontinued Operations." Please see information on this and other non-IFRS measures in the "Non-IFRS Measures" section of this news release and in IBC's MD&A, available on sedarplus.ca.
